"A fool and his money are easily parted"

One reason why I recommended using the DOW as your initial watchlist was to protect you from some volatility. When it comes to the stock market, volatility is synonymous with high risk. While high risk does increase you chances of profits, it also increase your chances of losing your capital. Once you start taking on high risk you cease being an investor and become a speculator. You can become a speculator after gaining some experience.

Speculation provides both excitement and pains. The DOW components are not going to provide you much excitement. You are not going to get adrenaline rush by watching their price movements, but you will not get a heart attach either. As a beginner you just want something boring -- at this point too much excitement is not good for your heart. Do you remember the rumor on how Nelson Rockefeller died? Do you want your portfolio to also die from that much excitement?

You are becoming a speculator if you are doing any of the following

1. You are buying stocks priced at < $5 (most great investments cost more than $5/share)
2. Percent changes in your portfolio are higher than movements in market indexes (i.e. your portfolio contains high beta names and/or names with high implied volatility. High beta and high implied volatility = high risk)
3. You can have astronomical gains or loses depending on an announcement (example: you own Biotech company that is waiting for FDA approval)
4. You own companies without any products on the market
5. You spend more time watching what is going on with the Nasdaq
6. You bought shares in a company, but you don't know what the company does
7. Most of your positions trade on the OTC or have small market cap
8. You buy foreign names but don't pay attention to foreign news
9. You own a company whose PE ratio can buy a share of ABT. High PE might be an indication of overvalued company. If the company does not meet expectations, the price will sink like the Titan but at a faster rate.

It is possible to find a diamond in the rough, but you are more likely to go through a rough patch before you find that diamond. Don't get me wrong, speculative names have their place in your portfolio – mainly as trades (i.e. you don't hold them longer than 3 months). But you should only trade speculative names after you have become better educated.

As a beginner if you become speculative you are more likely to lose your capital. So don't be a fool, because a fool and his money are easily parted.